ISLAMABAD: The incoming government plans to remove government control from about 200 companies in an initial attempt towards mass privastisation.
Asad Umar, finance minister-in-waiting, told Financial Times his government would place Pakistan’s major state-owned enterprises, including the national flag carrier, into a special fund to be managed at arm’s length from the government.
“[The] corporations will all be put in a wealth fund, which will be led by people from the private sector. We plan to transfer government owned companies under the control of the wealth fund within our first 100 days,” he said.
Umar said the fund would be used to revive loss-making or under-performing state-owned enterprises, citing the Pakistan International Airlines (PIA) as one company that needed to be restructured.
He had earlier said the new government was considering every option available, including approaching IMF for a loan, which would be the country’s 13th bailout from the fund. “No option including IMF is ruled out,” he spoke on a private TV channel programme.
Pakistan’s economy has hit severe turbulence over the past year and most analysts expect the nuclear-armed nation to seek a bailout, either from the IMF or closest ally China, to avoid a currency crisis.
Beijing has pledged $57 billion in loans for Pakistan as part of China’s vast Belt and Road initiative, deepening economic and diplomatic ties between the neighbors at a time when relations between Islamabad and Washington are fraying over how to deal with Islamist militants waging war in Afghanistan.
US Secretary of State Mike Pompeo had warned that any potential IMF bailout for Pakistan’s incoming government should not provide funds to pay off Chinese lenders.
In response, Pakistan’s finance ministry sought to de-couple the link between any potential IMF bailout and Beijing’s loans for the China-Pakistan Economic Corridor (CPEC), which spans mostly energy and transport infrastructure.
“First and foremost it is totally wrong to link the IMF package with CPEC. It is affirmed that Pakistan Government is fully committed to undertake and complete CPEC projects in their totality,” the finance ministry said in a statement.
“Third parties cannot weaken our collective resolve to make CPEC a success story.” – NNI